Tata wants to get rid of “cheapest” tag for the Nano

Tata Motors builds what is considered as the cheapest car in the world, the Nano. Tata launched the Nano in 2009 at a tag of around $2,500, attracting low-income households in India who could only afford motorcyles. Ratan Tata, the carmaker’s chairman emeritus who championed the development of the car, is now rethinking the “cheap” tag of the Nano.

Tata remarked at the South Carolina Automotive Summit that the Nano got branded as India’s cheapest car, not the most affordable or the best value for the money. He noted that the Nano gained the stigma of “I don’t want to be seen in the cheapest car. My neighbors will think I have no money.”

Tata, who retired as chairman in December 2012, said the company is trying to reposition the Nano into a real car “with more bells and whistles” that would stand out in the marketplace. During an on-stage interview with Automotive News Editor-in-Chief Keith Crain, Tata quipped that he pushed for development of the Nano to provide low-income Indian families a safer transportation alternative than motorcycles.

Now, the carmaker is considering a new-generation Nano fitted with a bigger engine, having a broader global appeal and a higher sticker price. The chairman emeritus said that a bigger engine will address complaints that its 37-hp two-cylinder engine is noisy and sounds like a small motorcycle.

He, however, that despite creating two new versions of the Nano, the current model will still be offered to keep a promise to provide a car available to low-income families. He added that the carmaker mulls selling the Nano in new markets like Indonesia and some countries in Africa, where “families can’t afford to buy a normal car.”

Sales of the car peaked nearly 75,000 in 2012. Last year, sales fell below 22,000.Tata said he still believes in the merit of the ultralow-cost car. He predicts the next Nano could reach annual production levels of 500,000.

“India produces 3 million cars a year,” he said, “and 11 or 12 million two-wheelers a year. I believe that we should realistically be able to sell a half-million cars of this kind on a steady basis.”